Sensex tanks, Nifty below 15,750: Key factors hurting market today

NEW DELHI: Indian benchmark indices joined the global sell-off and plunged on Monday amid uncontrolled pandemic in parts of Asia and fear of faltering economic growth.

This is despite regular assurances by the US Fed that it will keep pumping cheap money into the system until the economy is out of the woods. However, the market has been hard to convince, finding any opportunity to sell. Thus, volatility also spiked.

“Some stock-specific actions can be witnessed in stocks such as Tata Power and HPCL (both partnered to provide end-to-end EV charging stations), Rossari Biotech (to buy Tristar Intermediates for Rs 120 crore), Sundaram Finance (plans up to Rs 500 crore two-part bond sale)," said Mohit Nigam, Head, PMS - Hem Securities.

How are the bluechips doing?
After opening in the red, benchmark indices extended the fall. At 02.20 pm, BSE flagship Sensex was down 626 points or 1.18 per cent to 52,513.57. NSE benchmark Nifty dropped 182 points or 1.15 per cent to 15,740.45.

In the 50-share pack Nifty, BPCL was the biggest gainer, up 1.31 per cent. Divi's Lab, NTPC, Tata Consumers, Nestle, Britannia and L&T were among other gainers.

HDFC Bank was the top loser in the pack, down 3.44 per cent. IndusInd Bank, Adani Ports, HDFC, Axis Bank, HDFC Life and Hindalco were other losers in the pack.

FACTORS DRIVING MARKETS
Bad news:
Economic recovery falters: Global economic growth is beginning to show signs of fatigue. Economists at Bank of America downgraded their forecast for US economic growth to 6.5 per cent this year, from 7 per cent previously, but maintained their 5.5 per cent forecast for next year.

Virus scare: Many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into taking lockdown measures.

Good news:
Bond yields fall: Benchmark 10-year Treasury yields dropped to a near two-week low at 1.2640 per cent. Falling yields mean more money coming to emerging markets like India.

Broader markets
Broader market indices were trading lower but outperformed their headline peers in morning trade. Nifty Smallcap was down 0.60 per cent, while Nifty Midcap declined 0.66 per cent. Broadest index on NSE, Nifty 500 was down 0.79 per cent.

Rossari Biotech, CAMS, Welspun India, V-Guard, ICICI Securities and Tata Power were gainers from the space, while Apollo Tyres, L&T Financial Holdings, Dhani Services, Cyient, CDSL and Happiest Minds were under selling pressure.

Global markets
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent for a second straight day of losses to 677.45, a level not seen since July 12. The index was on track for its biggest daily percentage drop since July 8.

Japan's Nikkei dropped 1.3 per cent as did Australia's benchmark share index. South Korea's KOSPI was 1 per cent lower, while Chinese stocks also started on the backfoot with the blue-chip index down 0.6 per cent.